The Market Oriented University

The Market Oriented University

Transforming Higher Education

John A. Davis and Mark A. Farrell

The next decade will be transformative for the higher education sector. Government funding is decreasing. Through their marketing activities universities have created the ‘student consumer.’ The student consumer is prepared to shop around, compare prices and value, and once purchased expects a return on their investment. Disruptive innovations are challenging traditional forms of learning and in many cases are viewed as better alternatives to traditional learning in the classroom. Competition from private educational providers is increasing. Their cost base is lower, and their customer focus is superior. In short, universities around the world are facing a perfect storm. While experts don’t expect the higher education sector to collapse under these challenges, they do believe that for some institutions the future looks bleak. If universities are to avoid closures or mergers, they will need to adopt a market-oriented approach.

Chapter 1: Towards a market oriented university

John A. Davis and Mark A. Farrell

Subjects: business and management, management education, management and universities, marketing, education, management and universities, management education

Abstract

In this chapter we argue that the higher education sector and the leaders of universities are remarkably resistant to change, and that the main impetus for innovation in higher education is the government. In an increasingly competitive and globalized world, governments look to higher education as a means to earn export dollars, make a contribution to society’s problems, and provide an educated work force for the economy. In this chapter we demonstrate that the view of higher education as a public good has been replaced with a government philosophy and policy direction that the main beneficiary of higher education is the private individual. In short, the individual receives a private benefit and as such is a consumer of higher education. Concomitantly, government is looking to the individual to shoulder an increasing financial burden as shrinking government budgets are stretched to meet the demands of other areas of the economy. The result is reduced government funding, increasing competition from traditional and non-traditional providers, and an increasingly demanding and sophisticated student/consumer.